Seek targets Asia with HK buy

Online recruiter
Seek
has snapped up a 60 per cent stake in Hong Kong-based JobsDB for $HK1.59 billion ($206 million) as it launched a new Asian arm, dubbed Seek Asia.

Seek said the share purchase enhanced its investment in South East Asia online recruitment sector; it already holds a 22.4 per cent stake in regional player JobStreet Corporation.

Under the terms of the JobsDB acquisition agreement, Seek,
Consolidated Media Holdings
,
Macquarie Capital
and Tiger Global formed Seek Asia to acquire the 60 per cent stake in the business. Seek holds a 60.9 per cent interest in Seek Asia and will stump up $142 million of the $206 million purchase price for the JobsDB purchase.

Seek co-chief executive Andrew Bassat said investors have embraced SEEK’s recent spate of acquisitions, with a number of strategic deals giving the company exposure to high-growth potential markets in Asia, Mexico and Brazil.

“We thought we had experience and capabilities that could help players, particularly in the early stage markets, to get it right and create value," Mr Bassat told AFR Dealbook.

“This is all about us having a growth profile that goes far beyond the structural shift in Australia from print to online, as an organisation it will stand us in good stead," he said.

For the 12 months ending December 31, JobsDB is expected to book revenue of $HK230 million and earnings before interest, tax, depreciation and amortisation of $HK120 million.

“Based on our previous investment in South East Asia, we have a strong belief in the high growth potential for online employment advertising in these regions," Mr Bassat said in a statement to the Australian stock exchange.

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Mr Bassat said the Jobs DB transaction would be “slightly earnings neutral" in the financial 2011 and “marginally accretive" in 2012. “Beyond that we expect these businesses to have higher growth rates due to the early stage nature of the markets over there. Over time, we expect it to be strongly accretive from there all being well," he said.

In terms of future acquisitions, Mr Bassat said “[SEEK] will always look for good opportunities, but at the same time we are very conscious that we have got the capacity and the bandwidth to do them".

Seek will fund its investment in JobsDB through a new, $340 million bank debt facility that is fully underwritten by National Australia Bank.

Goldman Sachs and Arnold Bloch Leibler advised on the transaction.

Separately, Seek said that it had appointed corporate strategy director Jason Lenga to the newly created role of managing director of Seek International.